IMPORTANT POINT
When the doctrine of equal pay for equal work is sought to be extended to compare pay-scales in one organisation with pay scales in another organisation, although between employees doing comparable work, the stretching of the doctrine, if it is done, must be done with caution lest the doctrine snaps.

Headnote:SERVICE LAW-Doctrine of Equal pay for equal work -Applicability-It has since been applied in cases of irrational discrimination in pay scales of workers doing same or similar work in an organisation-It has not been applied when there is a basis or an explanation for the difference-Doctrine is inapplicable when alleged discrimination is between employees of two different authorities.
       Held : In Randhir Singh v. Union of India and Ors., 1982(1) SCC 618, this Court construed Articles 14 and 16 in the light of the preamble to the Constitution to read into their scheme the principles of equal pay for equal work. The principle has since been applied in cases of irrational discrimination in the pay-scales of workers doing the same or similar work in an organisation. It has not been applied when there is a basis or an explanation for the difference. (Para 1)
       Further held : When the same principle is sought to be extended to compare pay-scales in one organisation with pay-scales in another organisation, although between employees doing comparable work, the stretching of the doctrine, if at all it is done, must be done with caution lest the doctrine snaps. Many ingredients go into the shaping of wage structure in any organisation. Historically it may have been shaped by negotiated settlements with employees unions, or through industrial adjudication. It may have been revised or reshaped with the help of expert committees. The economic capability of the employer also plays a crucial part in it; as also its capacity to expand business or earn more profits. If the employing organisation functions in a competitive area, it may, if it is economically strong, offer higher wages than its competitors doing similar work to attract better talent. Or it may offer higher wages to the better qualified. A simplistic approach, granting higher remuneration to other workers in other organisations because another organisation has granted them, may lead to undesirable results. Even within the same organisation, when the differential wage structure is based on similar considerations, the application of the doctrine would be fraught with danger, and may seriously affect the efficiency, and at times, even the functioning of the organisation. The doctrine is designed to correct irrational and inexplicable pay differentiation which can be looked upon as discrimination against an employee or a given set of employees. It is easier to identify such discriminated groups when the discriminated group is sex-based (women) or colour-based (Blacks in the USA) or caste-based (scheduled castes etc.); and more difficult to identify in other cases. But unless there is such identifiable discrimination, the doctrine should not be applied. Mere difference is not discrimination. (Para 3)
       (ii) Constitution of India-Article 32-Writ petition-Employees of various banks which are subsidiaries of State Bank of India-Claiming higher terminal benefits, better medical benefits and extra increments in their pay scale as available to employees in State Bank of India-Looking to scheme of State Bank of India, can employees of subsidiary banks be considered as employees of State Bank of India?-(No)-Each of the subsidiary bank has its own capital structure, its own operations, its own staff with its own terms and conditions of service-Employees of subsidiary bank are not entitled to claim same benefits as employees of State Bank of India.
       Held; looking to the scheme of the State Bank of India (Subsidiary Banks) Act, 1959, it is quite clear that each of the subsidiary banks is set up as a separate bank. Each subsidiary bank has its own capital structure, its own operations. Each of the banks has its own staff with its own terms and conditions of service. Therefore, the employees of the subsidiary bank cannot be treated as the employees of the State Bank of India. The employees of the subsidiary banks are not entitled to claim the same benefits as the employees of the State Bank of India on the ground that they are, in effect, the employees of the State Bank of India. (Para 12)
       Further held that the terminal benefits in a subsidiary bank are comparable to the terminal benefits in nationalised banks, where also there is an option between pension or contributory provident fund. Regarding gratuity, the employees of a nationalised bank are entitled to service gratuity or gratuity as per the Payment or Gratuity Act, whichever is higher, which is the position in the subsidiary banks also. Looking to this comparative position, we do not see any reason to infer discrimination. (Para 14)
       The subsidiary banks are not in a comparable position. Nor are their scales of operation comparable to the State Bank of India. The responsibilities of their officers are not comparable in view of the extent of operations of the subsidiary banks. In these circumstances, if the State Bank of India has offered increments to persons joining the State Bank of India, the same cannot be given to the officers joining the subsidiary banks. (Para 16)
       All the grievances centre around these benefits. We do not think that the State Bank of India and the subsidiary banks are in a comparable position in this regard. It is also submitted by learned counsel for the State Bank of India that the benefits which are extended to the employees of the subsidiary banks are negotiated settlements with the unions of their employees. The benefits which are conferred are in accordance with the agreements which have been reached between the unions of the employees and the management of each bank. In these circumstances, we fail to see how the principle of "equal pay for equal work" can be applied in the present set of facts. (Para 17)

JUDGMENT

Mrs. Sujata V. Manohar, J.-"Equal pay for equal work for both men and women" is one of Directive Principles of State Policy laid down in Article 39(d) of the Constitution. Article 37 makes it non-justiciable. Yet it must be borne in mind by the legislature while making laws. In Randhir Singh v. Union of India and Ors1, this Court construed Articles 14 and 16 in the light of the preamble to the Constitution to read into their scheme the principle of equal pay for equal work. The principle has since been applied in cases of irrational discrimination in the pay-scales of workers doing the same or similar work in an organisation. It has not been applied when there is a basis or an explanation for the difference.

2. Historically, equal pay for work of equal value has been a slogan of the women s movement. Equal pay laws, therefore, usually deal with sex-based discrimination in the pay-scales of men and women doing the same or equal work in the same organisation. For example, the Equal Remuneration Act 1976 provides for payment of equal remuneration to men and women workers and is meant to prevent discrimination on the ground of sex against women in the matter of employment. The Equal Pay Act 1970 and the Equal Pay (Amendment) Regulations 1983 in Great Britain are for a similar purpose. The same doctrine has also sought to protect disadvantaged groups against similar discrimination. We have interpreted and applied the doctrine even more widely to prevent discriminatory pay-scales within an organisation which is owned by or is an instrumentally of the State, provided that the different pay-scales exist in one organisation, are applied to employees doing work of equal value, and there is no rational explanation for the difference.

3. When the same principle is sought to be extended to compare pay-scales in one organisation with pay-scales in another organisation, although between employees doing comparable work, the stretching of the doctrine, if at all it is done, must be done with caution lest the doctrine snaps. Many ingredients go into the shaping of wage structure in any organisation. Historically it may have been shaped by negotiated settlements with employees unions, or through industrial adjudication. It may have been revised or reshaped with the help of expert committees. The economic capability of the employer also plays a crucial part in it; as also its capacity to expand business or earn more profits. If the employing organisation functions in a competitive area, it may, if it is economically strong, offer higher wages than its competitors doing similar work to attract better talent. Or it may offer higher wages to the better qualified. A simplistic approach, granting higher remuneration to other workers in other organisations because another organisation has granted them, may lead to undesirable results. Even within the same organisation, when the differential wage structure is based on similar considerations, the application of the doctrine would be fraught with danger, and may seriously affect the efficiency, and at times, even the functioning of the organisation. The doctrine is designed to correct irrational and inexplicable pay differentiation which can be looked upon as discrimination against an employee or a given set of employees. It is easier to identify such discriminated groups when the discriminated group is sex-based (women) or colour-based (Blacks in the USA) or caste-based (scheduled castes etc.); and more difficult to identify in other cases. But unless there is such identifiable discrimination, the doctrine should not be applied. Mere difference is not discrimination.

4. In the case before us the Unions of employees of various banks which are subsidiaries of the State Bank of India have claimed higher terminal benefits, better medical benefits and extra increments in their pay-scale on the ground that such benefits are available to the employees holding equivalent or similar ranks in the State Bank

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1997 Supreme(SC) 1340

Cases Referred (2)